Governance of Innovation for Sustainable Transport Biofuels in Sweden 1990-2010

The report assesses the Swedish biofuels innovation system from 1990 to 2010, finding that while it functioned well overall—increasing the market share of first-generation biofuels—it remained heavily dependent on public governance. The analysis highlights a strategic imbalance where over-attention to market formation for first-generation fuels (ethanol and biodiesel) may have hindered the research and development of more sustainable second-generation alternatives. External factors, including oil price fluctuations and evolving climate debates, significantly moderated the effectiveness of governance policies.

• The technological innovation system (TIS) for biofuels in Sweden was generally well-functioning, as all key processes were present and developed positively, leading to an increase in the market share of first-generation biofuels and progress in second-generation R&D.
• Governance played a decisive role in the system's functionality, creating a dependency where there was very little entrepreneurial experimentation or resource mobilisation originating from private actors alone.
• There was a strategic imbalance in governance priorities, with excessive focus on the market formation of first-generation biofuels at the expense of the research, development, and demonstration (RD&D) of second-generation biofuels.
• Market formation for first-generation biofuels was driven by a variety of governance arrangements since 2000, including public procurements of vehicles, tax exemptions, and the reduction of fringe benefit taxes for company cars.
• External landscape factors, specifically urban air quality in the 1990s, rising oil prices around 2000, and the climate change debate since 2005, were the primary drivers affecting the legitimation of biofuels.
• Biogas faced greater challenges than ethanol and RME due to higher costs, a lack of alignment with fuel and vehicle regimes, and the absence of strong lobby organisations to drive legitimation and knowledge diffusion.
• The legitimation of biofuels suffered a backlash around 2007-2008 as the public debate expanded to include sustainability concerns regarding land use and food prices, which favoured electrification and fuel-efficient diesel over biofuels.
• Knowledge development was largely driven by public R&D and demonstration programmes, including support for cellulosic ethanol and synthetic fuels like DME produced from black liquor gasification.

APA

Hillman, K. M. (2011). Governance of Innovation for Sustainable Transport Biofuels in Sweden 1990-2010. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Hillman-GovernanceOfInnovationForSustainableTransportBiofuelsInSweden19902010.pdf

Chicago

Hillman, Karl M. Governance of Innovation for Sustainable Transport Biofuels in Sweden 1990-2010. Stockholm Environment Institute, 2011. https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Hillman-GovernanceOfInnovationForSustainableTransportBiofuelsInSweden19902010.pdf.

Wikipedia

{{cite report |last1=Hillman |first1=Karl M. |title=Governance of Innovation for Sustainable Transport Biofuels in Sweden 1990-2010 |publisher=Stockholm Environment Institute |date=2011 |url=https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Hillman-GovernanceOfInnovationForSustainableTransportBiofuelsInSweden19902010.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hillman2011governance, author = {Hillman, Karl M.}, title = {{Governance of Innovation for Sustainable Transport Biofuels in Sweden 1990-2010}}, institution = {Stockholm Environment Institute}, year = {2011}, url = {https://www.sei.org/mediamanager/documents/Publications/SEI-ProjectReport-Hillman-GovernanceOfInnovationForSustainableTransportBiofuelsInSweden19902010.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }